Market

A detailed examination of China’s economic predicament and the ways in which inexperience is escalating it
15Oct By TheGreenZoneNo Comments
China, Market

A detailed examination of China’s economic predicament and the ways in which inexperience is escalating it

This is the first in a three-part series delving into the unprecedented challenges China is facing on its road to economic recovery, from inexperience in dealing with such crises to the compounding implications of internal demographic shifts and external trade hurdles. The topsy-turvy roller-coaster ride that has seen China’s economy teetering on the rails for the past four years has left Zack Yao clinging to whatever business he can muster while struggling to determine when the wild ride will end. At 37 years old, the seller of electric power tools in the eastern province of Zhejiang has never experienced anything like the series of ups and downs that accompanied China’s pandemic years and subsequent attempts to return to economic normality. “I can still feel the sting...
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Can China’s lethargic economy be revived by the massive stimulus spending the government is planning?
15Oct By TheGreenZoneNo Comments
Asia, China, Market

Can China’s lethargic economy be revived by the massive stimulus spending the government is planning?

China’s relentless economic growth used to be the marvel of the world. Oh, what a memory. The past couple of years have seen China contend with an economic slowdown amid colliding crises, many of which make it internationally unique. Consumer prices have been approaching deflationary territory, there’s an oversupply of housing, and youth unemployment has soared. Mounting pressure has forced the Chinese government to step in. Over the past month, Beijing has put forward a set of significant economic stimulus measures aimed at reviving China’s faltering economy. According to a research note by Deutsche Bank, this stimulus could potentially become “the largest in history” in nominal terms. But there’s still a lot we don’t know. So what kinds of measures that are ...
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14Oct By TheGreenZoneNo Comments
Asia, China, Market, World

Goldman Sachs upgraded their predictions for China’s economic expansion.

Analysts expect China's GDP to grow by 4.9% in 2024 Goldman Sachs has improved its forecasts for China’s economic growth in 2024 and 2025, Bloomberg  The forecast has been improved on the back of Beijing’s unveiling of a number of stimulus measures, including recent plans to increase government spending. Goldman Sachs expects China’s GDP to grow by 4.9% this year, up from 4.7% previously forecast. According to a new research note, the investment bank also raised its forecast for Chinese economic growth in 2025 to 4.7% (previously 4.3%). On October 12, China promised to “significantly increase” debt issuance to revive its economy, Reuters writes, but left investors guessing about the total amount of the stimulus package. Finance Minister Lan Foan said: Beijing will help...
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14Oct By TheGreenZoneNo Comments
Asia, China, Market

The pendulum of Chinese economic policy has swung in favor of stimulus, but moderate expectations are advised.

Policymakers in Beijing have spent the past three weeks trying to convince the world that they are determined to deliver meaningful support to China’s sagging economy.  Since late September statements have come from the central bank, which promised to cut interest rates, release liquidity, and provide funding to securities firms; from the politburo, which said it wanted to stabilize the real estate market, boost the capital market and shift towards looser fiscal and monetary policy; from the government’s main planning body, which promised a package of policies to support domestic demand; and from the finance minister himself, who at the weekend committed to issue more debt to recapitalize banks, support local governments and aid unhappy consumers. Though details have been scant...
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13Oct By TheGreenZoneNo Comments
Asia, China, Market, World

India starts to reconcile its economic ambitions with security fears about China.

Indian Prime Minister Narendra Modi's government tightened scrutiny of foreign direct investment amid security concerns during the COVID-19 pandemic, largely curtailing China's economic influence. But as India aspires to become the world's third-largest economy by 2029 and a developed nation by 2047, it must grapple with balancing economic ambitions with security concerns and is beginning to cautiously accept Chinese investments in sectors such as electronics manufacturing to boost local production capabilities. Since first assuming office in 2014, Prime Minister Narendra Modi’s government has aimed to increase the share of manufacturing in India’s GDP. In 2014, the government launched the Make-in-India campaign, which pushed for more manufacturing and invited foreign direct ...
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Here are four factors that make the cash-strapped economy of Pakistan the subject of international attention.
12Oct By TheGreenZoneNo Comments
Asia, Market

Here are four factors that make the cash-strapped economy of Pakistan the subject of international attention.

Pakistan's economic crisis deepens as the International Monetary Fund (IMF), a global financial agency, eyes implementing policy reforms in the South-Asian nation. This is the latest development in Pakistan's economic crisis row as the nation tries to borrow its way out of its debt situation. IMF's row with Pakistan to improve its economic situation has been spread over several events. The nation aims to reduce expenditures, increase the tax-to-GDP ratio, tax non-traditional sectors like agriculture and real estate, limit subsidies, and transfer some fiscal responsibilities to provinces. The news agency PTI reported on Saturday, October 12, quoting a local news portal, The News International. It said that the International Monetary Fund (IMF) has focuse...
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Economists urge stronger action from China to combat deflation.
12Oct By TheGreenZoneNo Comments
China, Market

Economists urge stronger action from China to combat deflation.

China moved to further ramp up support for the economy, promising more aid for the slumping property sector and indebted local governments. But officials still haven’t convinced economists that they’re doing enough to defeat deflation. At a highly anticipated briefing on Saturday, Finance Minister Lan Fo’an refrained from putting a price tag on China’s fiscal stimulus as investors expected, signaling that details would come when China’s legislature meets in the coming weeks. The supportive measures he did announce, however, gave little indication Chinese authorities felt any urgency to ramp up consumption, which many economists see as essential to reflating the economy and putting it on a more positive growth trajectory. “The policy to support consumption sounds quite...
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10Oct By TheGreenZoneNo Comments
Asia, Market, World

According to the World Bank, implementing reforms is still essential for sustained economic recovery and poverty reduction.

Pakistan’s economy has continued to stabilize from the recent economic crisis, with growth recovering to 2.5 percent in the fiscal year ending June 2024, says the World Bank in its latest country economic update. Released today, the Pakistan Development Update: The Dynamics of Power Sector Distribution Reform, finds that following recession in FY23, economic activity strengthened in FY24 reflecting strong agricultural output, lower inflation, prudent macroeconomic measures, and reduced political uncertainty. But this level of growth is not sufficient to bring down poverty rates, which increased from 40.2 percent in FY23 to 40.5 percent in FY24. “Pakistan’s stabilizing economy is on a path of recovery. To sustain and strengthen that positive momentum, steady implementa...
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10Oct By TheGreenZoneNo Comments
Asia, China, Market, World

China’s economy is predicted by the World Bank to slow down in 2025.

According to World Bank estimates, China’s GDP growth rate next year will decrease to 4.3% compared to the projected 4.8% in 2024. This is stated in the institution’s new economic forecast for the Asian region. China’s economic slowdown in 2025 is expected amid continued weakness in the real estate market, low consumer and investor confidence, as well as structural challenges such as an ageing population and global tensions, it said. Expectations for 2024 rose by 0.3% compared to the bank’s April forecast. As CNBC notes, this reflects Beijing’s recent introduction of a series of stimulus measures that boosted investor confidence and sparked a stock market rally that has since stalled. Economies in the rest of East Asia and the Pacific region will grow from 4.7% in ...
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8Oct By TheGreenZoneNo Comments
Asia, China, Market

When stimulus news is disappointing, the China stock surge stalls.

A stock market rally in China has fizzled out as a highly-anticipated announcement on plans to boost the country's ailing economy disappointed investors. Shares had jumped by over 10% as trading restarted after the Golden Week holiday but fell back after a news conference by the country's economic planners. After a volatile day of trading, the Shanghai Composite Index in mainland China closed 4.6% higher, while the Hang Seng in Hong Kong slumped by 9.4%. Investors had been hoping for more information about how the government plans to support economic growth but the announcement gave little in the way of details. The chairman of China's National Development and Reform Commission Zheng Shanjie said he is "fully confident" the country will achieve its full-year economic and socia...
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